If London is the world capital of Twitter, should Twitter incorporate in the UK?

Crazy, right? Only that it is not so much so. If you keep abreast of the trendy fashion for many investors to make their Continental European startups to incorporate in the UK, I do not sound that off the charts.

It has begun to worry me that the minute there is a startup with any chance of making it for real, and hence attract the savvy UK investors, the company mysteriously becomes a UK limited company. This is indeed misleading in many ways and opportunistic in detriment to some countries where the entrepreneurs are trying to create an entrepreneurial culture and industry that grows to a size that it is able to attract the attention of their own financial industry and the local government.

If the UK keeps on “stealing” Europe’s startup talent, what legacy is there left for these Continental countries?

Back in the 1990s and early 2000s investors and Valley people used to lure UK and French startups to incorporate in the US so that they could get Valley money, recognition and fame. Western Europe in those days was a land of barren opportunity: raising money was excruciating, hiring developers (unless you imported them from Ireland) an arduous task and regulation was so unwelcoming for a startup.Many did then and many still do it now: Seesmic (French founder), Kyte (Swiss founder), (you go on, please).

When IPOs were in fashion, incorporating a US holding company in Delaware with the purpose of, if opportunity rose, a NASDAQ listing was be the thing to do and many of us went for this option.

All of the above was strategic, and thank God decreased overtime when the UK finally created a startup market that allowed for flexibility, tax breaks and all the important elements that you need to leverage from when you are to build a business from scratch.

What is happening now is going to slap in the face many people and perhaps it is time to highlight this seriously growing trend of snatching innovation value from a country – Germany, Sweden, Slovenia (Mendeley, RJDJ, Spotify, Zemanta… shall I go on?)

Local VCs and private investors better smarten up and learn how to support their own local talent or it will defect to Blighty.